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Chexsystem checking accounts are the usual type of bank accounts that many of us operate for our everyday business. Before a customer is able open a new account the bank will almost certainly carry out a search to check that the applicant is not in ChexSystems. If there are, the application is likely to then be rejected.

ChexSystems is a check verification service and a credit reporting agency for deposit accounts, working in much the same way as Equifax, Experian and Trans Union do for credit accounts. In the same way that credit applications may be rejected if a customer has black marks on their credit report, a deposit account application may be rejected if the customer is in ChexSystems.

A person can land in ChexSystems for a number of reasons. The main reasons include writing dishonored checks, not having the necessary funds to honor an agreed payment, exceeding a set overdraft limit, having unsatisfied balances and performing other banking irregularities. With over 80 percent of banks using the service, it can be difficult for people in ChexSystems to be approved for a new account.

The first step for anyone that has found themselves in ChexSystems is to retrieve a copy of their report and check that all irregularities listed against their name are accurate. Inaccurate items can be disputed and removed and the customer may again become eligible to open a new bank account.

If the black marks are correct, short of waiting for it to expire (which could take up to five years), another option is look at non-ChexSystems checking accounts. These work in much the same way as a regular bank account, but the finance company does not carry out a ChexSystems check before granting approval.

These non-ChexSystems checking accounts usually offer all of the same benefits of a regular bank account, such as the facility to deposit and withdraw money, to write checks and to pay bills using their account number. Accounts of this type can often be found through the Internet, sometimes under the name ‘bad credit checking accounts’. Decisions are often usually made online within minutes.

The downside with bank accounts of this type is that they usually have higher charges for everyday transactions, such as ATM cash withdrawals. The finance provider also sometimes charges a monthly or annual fee for using the service, though this can vary.

Overall, these accounts are a viable alternative to Chexsystem checking accounts as they will provide a customer with the many benefits of everyday banking, even when they are ‘stuck in ChexSystems’. Although the charges are higher, it will still save a considerable amount on the check cashing fees payable when you have no bank account whatsoever.

The first option, however, should always be to avoid ending up in ChexSystems in the first place, or failing that, to access a copy of your ChexSystems report and see exactly why you are being refused for a new bank account. Prevention is always better than looking for the cure.

For more about non chexsystems or for a review of a card you can still be approved for the orchard bank credit card it will report to all three major credit bureaus.

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